Insurance in Tennessee

Tennessee requires Contractor License applicants to maintain general liability insurance as a condition of licensure. Workers' compensation is required for construction-trade employers with one or more employees under Tenn. Code Ann. 50-6 (the general-industry threshold is five or more employees, but construction is specifically called out at one or more). Minimum coverages a new trades shop should expect to carry: - General liability. $500,000 or $1M per occurrence is typical for residential work; $1M per occurrence / $2M aggregate is the standard for commercial jobs. The Board for Licensing Contractors requires proof of coverage on the application. Covers bodily injury and property damage arising from your work. - Workers' compensation. Required for construction-trade employers with one or more employees under Tenn. Code Ann. 50-6. The Tennessee Bureau of Workers' Compensation administers the system. - Commercial auto. Your personal auto policy almost certainly excludes business use. Hired and non-owned auto coverage protects against claims arising from employee-owned vehicles used on company business. - Tools and equipment (inland marine). Homeowners and auto policies exclude business tools beyond small dollar limits. Inland marine is the contractor-specific tool coverage. - Umbrella. A $1M or $2M umbrella is cheap relative to what it protects on a job with property damage exposure. Shop the market. Trade association programs (ABC Tennessee, AGC, PHCC of Tennessee, MCA, IEC Tennessee) often have group insurance programs that beat street-rate premiums for specialty trades. Independent agents who write construction can quote multiple carriers and compare class codes. Never let coverage lapse during an active job. A one-day gap on a multi-month project is enough to void a claim if something happens during the gap. The Board can suspend a license if required coverage lapses.